The U.S. Dollar is trading in weaker ranges as a bout of risk appetite has taken over markets.
Overview
In a week thus far that has offered more tightening from other central banks and evidence of a slower pace of economic growth, equities are still on the positive, and the mood about the second half of the year has not increased in being sour. Technology seems to be making progress, and the prospect of higher interest rates in other countries is affecting the dollar.
We are also entering a period when central bank policy divergence is primarily going to put downward pressure on the dollar. Speculation is growing that the Fed could be in for more than just the skip expected for their June 14th meeting. If, indeed, other central banks are more willing to tighten their purses while the Fed takes a break, the future can be a painful one for dollar strength. The advance across the board today may be indicative of a hurting buck to characterize June.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇑
The Euro is up to its best level in two weeks regardless of the release of the Euro-zone Gross Domestic Product for Q1 showing a recession could not be avoided. Countries like Lithuania, the Netherlands, as well as Germany, are experiencing contractions dragging down the continental pact. Currently, no one seems surprised that the Euro-zone is having headaches, but a determination to combat inflation by the European Central Bank as well as hopes that Germany will make quite a face turn, are making for the shared currency to avoid any sinking. Military expenditures and a push to electrify vehicles and highways are projects shedding some good light.
JPY ⇑
The Japanese Yen is finally pivoting towards advancement following better-than-expected GDP numbers for the final revision of Q1. The pace came in at 0.7% vs. 0.5%, thus indicating that the accommodative financial environment the BOJ has allowed to flourish is paying dividends as growth. The Yen could be set for serious gains as others place faith in JPY as a reserve currency while hoping for a change of monetary policy towards the “hawkish” which will only strengthen the Yen further.
